Baupost’s Hutchinson Investors LLC may pay Man Group an
additional $5 million if the recovery value of the Lehman claims
exceeds certain thresholds in the future, the London-based firm
said in a statement today. Man Group is selling the Lehman
claims for 32 percent more than their $346 million value at the
end of June, according to the statement.

Man Group acquired the Lehman liabilities from investment
funds run by GLG Partners LP, the London-based hedge fund
manager the firm bought for $1.6 billion in October 2010. Man
Group said it will use the proceeds from the sale to Hutchinson
to bolster regulatory capital. Analysts including Daniel Garrod
of Barclays Plc raised concerns last month that Man Group’s
capital cushion was deteriorating.

Selling the Lehman claims will boost Man Group’s regulatory
capital by about $140 million, Philip Middleton, a London-based
analyst at Bank of America Corp., who has a buy rating on the
company, wrote in a note to clients. Man Group had $500 million
of surplus capital at the end of September, down from $704
million three months earlier, it has said.

Shares Fall

Man Group fell 1.95 pence, or 2.6 percent, to 71.80 pence
in London, valuing the company at 1.3 billion pounds ($2.1
billion). The stock has slumped 50 percent over the past year
after clients pulled money from the company’s hedge funds and
its biggest investment pool posted losses.

Lehman collapsed in September 2008, triggering a global
credit freeze that led to the worst financial crisis since the
Great Depression in the 1930s. The New York-based company exited
bankruptcy in March and has been selling assets to try and meet
former clients and creditors’ claims. GLG Partners used Lehman
as a prime broker to its hedge funds.

Klarman, 55, started Boston-based Baupost in 1983. The firm
oversees about $25 billion and is known for investing in
distressed debt.